Lee Cusenbary is the General Counsel at Mission Pharmacal Company in San Antonio. He is also the creator of Ethics Follies®, a musical parody that uses comedy to raise ethics issues. The fully-produced Broadway-style musical combines San Antonio's business leaders and professional actors to engage the community. It is featured each year by The Association of Corporate Counsel (ACC) for their ethics conference which benefits The Community Justice Program. Lee is also a frequent writer and speaker on why "good ethics is good for business," and is a recipient of the San Antonio Business Ethics Award. In 2012, ACC renamed their ethics awards the "Lee Cusenbary Ethical Life Award" in recognition of his commitment to ethics in law and business. Learn more about how you can be part of a more ethical culture at EthicsFollies.com.

Note: This is an mySA.com City Brights Blog. These blogs are not written or edited by mySA or the San Antonio Express-News. The authors are solely responsible for the content.

KV’s Greed Gives Pharma a Bad Reputation

I have been blogging on KV Pharmaceuticals, Inc. for years now because they are the poster child for poor ethical decisions. We could do an entire Ethics Follies® musical ethics conference just on the Board of Directors and executives at KV. In full disclosure, I work for Mission Pharmacal Company, a competitor of KV. Much of my interest in KV is staying aware of how NOT to behave…a “reverse indicator,” so to speak.

KV sold prescripttion drugs that were out of specification (too much active ingredient) rather than foot the bill to recall them. They got caught by the FDA. The FDA recalled almost all their drugs just to teach them a lesson. They aren’t allowed to make a prenatal vitamin without getting a drug approval from the FDA (other companies don’t have to do this). The list of bad choices by KV goes on… Google them for pages of stories about bad choices.

The latest KV blunder is to take a reasonably priced drug that helps women prevent premature labor, get an FDA approval for it, then charge an astronomical price. Overnight, the drug became so expensive that everyone from the March of Dimes to the FDA was furious.

In the case of KV, I’m not sure Madonna was right when she said “there is no BAD publicity. Just publicity.”

Here’s more from writer Tracy Stanton:

“Here’s a fable about the dangers of overreaching. A pharmaceutical company, armed with exclusive rights to an FDA-approved drug for pregnant women, figures it has a lock on the market. The drugmaker slaps a big price tag on that drug and puts it up for sale. At $1,500 a dose, the company stands to take in significant sales.

But then something happens that the drugmaker didn’t count on. Those expectant mothers–and their doctors and government representatives–fight back. They were used to getting their doses at $10 to $15 each. The company tries to soothe the mother hens’ ruffled feathers. It offers help paying for the drug to any mother who might need it. But these mothers and their doctors are too outraged. They paint a very unflattering picture of the company in the media. They pressure this company to cut its price, but the company resists.

Then, FDA jumps into the fray. The agency doesn’t have the power to tell this company–a.k.a. KV Pharmaceuticals–to lower the price. But it can allow compounding pharmacists to keep on making their version of the new, expensive drug, and sell it at its old, much-more-affordable price. And that’s just what the FDA does, with an official statement released Wednesday morning.

“FDA understands that the manufacturer of Makena, KV Pharmaceuticals, has sent letters to pharmacists indicating that FDA will no longer exercise enforcement discretion with regard to compounded versions of Makena,” the agency said in a statement. “This is not correct.”

Whether KV will now decide to slash its retail price on Makena, which is designed to prevent premature births, remains to be seen. At press time, the company had not commented on FDA’s decision. In an earlier statement, KV said it’s committed to ensuring that Makena “is accessible to all women who are prescribed Makena and will address the concerns raised,” the St. Louis Post-Dispatch reports. But the moral of this story is clear: Sometimes, ambitious drugmakers will find their reach exceeds their grasp.”